Don’t Be a Victim of Mortgage Fraud
Last October, Portia Rankin of Louisville, KY got a big surprise when she discovered she had bought a house–but didn’t own it.
Ms. Rankin was forced to appear in court when “her” home on Highland Avenue became entangled in foreclosure and legal issues. It was the first she’d ever heard of the property; in fact, she’d never even seen the house.
So what happened? According to Ms. Rankin’s attorney, mortgage defrauders used Rankin’s stolen identity to obtain a loan for the property on Highland Avenue–and then took off with the money. Left in the middle was Rankin, who according to the deed is responsible for a property that she never wanted and now has fallen into disrepair.
Mortgage Fraud v. Predatory Mortgage Practices
According to identity theft experts, mortgage fraud encompasses an umbrella of criminal activities including the addition or omission of information, investor schemes and, yes, identity theft.
Unlike predatory mortgage practices, which involve a lender misleading a potential borrower, mortgage fraud is initiated by the “borrowers” themselves. Like Portia Rankin’s situation, many of these illegal practices involve using the good credit of an unknowing victim for a fraudulent purchase. Other times, identity criminals take out multiple loans on one property by posing as A-credit borrowers.
How They Get Away With It
How can a person be out $100,000, $200,000 or more and not know it? According to anti-ID theft researchers, though free credit reports can be obtained easily, most individuals don’t look at their credit reports more than once a year (and many check out their credit less often than that). This leaves plenty of time for a scammer to steal the victim’s ID, approach a bank and make the fraudulent purchase or loan.
Don’t Let the Next Victim Be You
A few steps will help prevent your identity from being stolen and used by mortgage defrauders:
- Buy a good quality shredder. Experts recommend a cross-shredder, which cuts the paper two ways to make the pieces as indecipherable as possible.
- Keep your social security card at home, preferably in a fire-safe box. Keeping your card in your wallet means that if your wallet is stolen, this crucial key to your identity is there for the taking.
- Request a copy of your credit report annually and look it over carefully for any unusual activity.
- Invest in a high-quality credit monitoring service. It will alert you to requests for loans in your name, and may include various trackers, including others using your full name or other identity on the internet.
- If you suspect any activity at all in your name, report it to the appropriate authorities IMMEDIATELY.
- Report lost or stolen credit cards as soon as you notice they’re gone. Have them canceled so that anyone using them as identification for beginning the loan or purchase process will be red-flagged as potential defrauders.
Most important of all, keep a close eye on your bank transactions and credit card bills. Some mortgage thieves will “test the waters” by making a smaller purchase initially; if they receive no repercussions, they’ll continue on to their larger scheme, which could ruin your credit and result in legal fees.
Be smart, be alert…and make sure the next mortgage fraud victim isn’t you.
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